Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to provide health and life insurance coverage for Neighborhood Crime Watch members.

This bill allows Crime Watch members to enroll in the Public Employee Insurance Agency (PEIA) health and life insurance plans with the premium costs paid by the State. It is our assumption that the reference to the State paying means that the cost would come directly from the General Revenue Fund.

In viewing the National Crime Prevention Council website there are no state crime prevention associations in WV. This does not preclude that there are volunteer members who have completed approved training. However, at this time the PEIA cannot ascertain the number of Crime Watch members in WV that meet the specified criteria. For purposes of preparing an estimate the PEIA uses the same numbers related to the WV volunteer fire fighters fiscal note. The number may be much greater or lower than the 10,000 used in this projection.

Since the bill allows the Crime Watch member to enroll their family in the PEIA health insurance plan with the premium cost being paid by the State, then it can be expected that all Crime Watch members will enroll their family members. While the health and life insurance coverage for this program is totally paid by the State of WV this is a strong incentive for individuals to take advantage of the Crime Watch program solely for the insurance.

Because the enrollment as a Crime Watch member would not be difficult and requires minimal participation many people that are presently paying for insurance coverage, do not have insurance coverage, have difficulty obtaining or are underinsured would enroll. Employed individuals that pay a share of their insurance premium would be inclined to drop their employer sponsored coverage and perform the part-time duties of this program for the free coverage.

It should be noted that there is a significant potential for adverse selection with passage of this legislation. Adverse selection dictates that only those individuals that need or require medical services will be the ones to take advantage of the program. The insurance program would experience higher claim utilization if this occurs that would result in higher medical claim costs
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Providing a $25,000 Basic Life insurance policy would cost the State General Revenue Fund $1,458,000.00 the first year alone.

The potential cost of 10,000 enrollees based on 70% single and 30% family with a 10% medical cost trend for health and life insurance coverage is as follow: